Reynolds American ex-CEO Cameron to return to post

MikeEsterl

Reynolds American Inc. said Wednesday that Chief Executive Daniel Delen is retiring after three years at the helm and will be replaced by Susan Cameron, the cigarette company's former top executive.

The sudden handover, effective May 1, was an unexpected development at the second-largest U.S. tobacco company by revenue, whose cigarette brands include Camel and Pall Mall.

Maura Payne, a Reynolds spokeswoman, said that Mr. Delen, 48 years old, decided to retire to "pursue his own interests and passions."

Mr. Delen became chief executive in March 2011, replacing Ms. Cameron, who had served as president and CEO and was a board member from 2004 to 2011. Ms. Cameron, 55, the first woman to run a major tobacco company, rejoined Reynolds' board of directors in December.

Mr. Delen, a 25-year industry veteran, will continue to consult for Reynolds for a period of two years. Mr. Delen had previously led the company's largest cigarette unit before taking on the CEO and president roles in March 2011.

Analysts were caught off guard when Ms. Cameron, then known as Susan Ivey, retired in 2011. But they praised her for leaving Reynolds American in good financial shape in an industry that has faced years of declining cigarette sales.

"We're pleased to have her back with the company to further our vision of transforming tobacco," said Nonexecutive Chairman Thomas Wajnert.

The switch comes at a sensitive time in the tobacco industry, which continues to grapple with declining sales amid widening smoking bans and tax hikes. Cigarettes are the No. 1 preventable cause of death in the U.S., killing nearly half a million people annually, according to government estimates.

Reynolds has seen its share of the U.S. cigarette market sag in recent years, to 27.4% in 2013 from 30.7% in 2005, according to Citi Research. Camel and Pall Mall have gained share in recent years, but several other Reynolds brands have struggled.

The company has shifted its focus toward a few key cigarette brands, while also expanding into smokeless tobacco and angling to compete in the e-cigarette category with a brand called Vuse.

Reynolds American isn't alone in bringing back a former CEO to lead its company. Procter & Gamble Co. and J.C. Penney Co. both notably brought back past CEOs last year after successors failed to lead turnarounds at those companies.

U.K.-based British American Tobacco PLC owns a roughly 40% stake in Reynolds.

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